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Andrew Smith

Andrew Smith

What Is Medicare?

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Medicare is a federal health insurance programme for those who meet the program’s requirements, such as those who are 65 or older, have certain disabilities, or have end-stage renal disease (ESRD), also known as permanent kidney failure.

Medicaid and Medicare are two different insurance programmes, but the two names are often used interchangeably. While both Medicare and Medicaid are federal health insurance programmes administered by the Centers for Medicare and Medicaid Services, Medicaid is distinguished from Medicare primarily by the fact that it is a needs-based insurance programme. You can get Medicare regardless of your income level.

Certain Medicare services have monthly fees attached. On top of that, Medicare has rules and restrictions regarding the types of medical expenses it will cover. Read on for details about Medicare’s different components, the services they provide, and how to sign up.

Medicare Parts

When Medicare coverage becomes available to you, decisions will need to be made. You must first choose between enrolling in Part A and Part B, or just Part A and delaying Part B. Since there is no premium for Option A, it is the most popular. It is important to note that enrolling in Medicare Part A will prevent you from making further contributions to a health savings account (HSA). After selecting your Parts A and B, you’ll have the option of enrolling in either Original Medicare with the addition of a supplement and Part D, or a Medicare Advantage Plan.

The Medicare Parts A, B, and D coverage and associated costs are as follows:

Medicare Part A
  • In general terms, Medicare Part A covers medical care received in a hospital. Medicare covers inpatient care, skilled nursing facility care, hospice care, and some home health care costs under Part A.
  • If you or your spouse have paid enough in payroll taxes over the years, you are eligible for hospital insurance through Medicare Part A at no monthly cost. You can buy Part A if you don’t get it for free because of your income. The length of time you or your spouse has paid Medicare taxes determines the amount of your monthly premium. For those who have paid taxes for fewer than 30 quarters, the monthly premium in 2022 is $499. If, however, you have worked and paid taxes for 30 to 39 quarters, your monthly premium will be reduced to $274.
Medicare Part B
  • Part B of Original Medicare is the health insurance coverage. Part B functions similarly to health insurance in that it pays for routine medical care such as doctor’s visits (both preventative and emergency), outpatient care, certain medical supplies, and wellness checkups.
  • Most people on Medicare must pay a monthly premium for Part B medical coverage. In 2022, the average payment will be $170.10. In addition to the base monthly premium, those with high adjusted gross incomes must also pay an Income Related Monthly Adjustment Amount (IRMAA). After your yearly deductible is met ($233 in 2022), you’ll be responsible for 20% of the remaining costs of covered medical care.
Medicare Part C
  • Health insurance companies that have been approved by Medicare offer Medicare Advantage, also known as Medicare Part C. In place of Original Medicare, a Medicare Advantage Plan would provide primary medical insurance. Medicare Advantage Plans are comprehensive replacements for Medicare Parts A and B, so you can think of them as “Medicare bundles.” Coverage for prescription drugs is a standard feature of Medicare Advantage plans, which is why most people opt for it. Dental and vision care, as well as gym memberships, can be reimbursed by certain Medicare Advantage plans. Comparable to Original Medicare Part A, Medicare Advantage Plans pay for hospitalisations, skilled nursing facility care, and home health services. Medicare Part C also includes coverage for outpatient services like doctor’s visits and lab work, similar to Part B. MRIs, OPs, and A&Es are all available.
  • Only 80% of medical expenses are covered by Original Medicare, which consists of Parts A and B. Meanwhile, Medicare Advantage Plans pay for all services covered by Parts A and B of Medicare for a small monthly premium. Most Medicare Advantage plans also have annual out-of-pocket maximums, and many have zero monthly premiums, making them a potentially more affordable option. Due to the fact that Medicare Advantage plans are offered by private companies, their prices vary widely. However, in all but a few cases, enrollees can expect to pay both a monthly premium and a monthly Part B premium. Part D, dental, vision, and hearing coverage can affect the total cost of a plan.
Medicare Part D
  • Prescription drug coverage, or Medicare Part D, can assist with the expense of treatment with medically necessary drugs. A formulary, compiled by a pharmacy and therapeutics committee made up of pharmacists and doctors, determines which medications are covered by each Medicare drug coverage plan. The formulary needs to be sanctioned by the CMS, which oversees Medicare and Medicaid in the USA. In order to treat your medical condition, your Part D plan must cover at least two medications in each therapeutic category. It is common practise for generic versions of a drug to be covered even if the brand-name equivalent is not.
  • There are out-of-pocket expenses when using Medicare Part D. The price tag will shift depending on the strategy you select. A monthly premium (which, if you so choose, can be taken straight out of your Social Security) and an annual deductible are typical costs associated with health insurance. There will be a $480 cap on the deductible in 2022. After your deductible is met, you’ll have to pay a set amount for each prescription medication you take. Extra Help may be available to assist with the costs of Part D if you are low-income and resourced.
Medigap
  • Medigap insurance, or Medicare Supplemental Insurance, is a type of insurance that complements Original Medicare. Supplemental health insurance, as the name suggests, is used to cover medical expenses beyond those paid for by Original Medicare. Only those who have signed up for Original Medicare can buy Medigap policies. It is not compatible with Medicare Part C or Part D. Medigap policies can be purchased from private insurers that have been given permission to sell them by Medicare.
  • Medigap costs extra money every month on top of what you already pay for Medicare Part B. The Medicare Supplement (Medigap) premium, in contrast to the Medicare Part B premium, is paid directly to the health insurance provider from whom you obtained your Medigap policy.
  • Medicare Supplement Insurance, or Medigap, is supplemental health insurance that helps you pay for some of the out-of-pocket expenses associated with having Original Medicare. Medigap policies will no longer pay the Part B deductible for newly eligible Medicare recipients as of January 1, 2020. The Medicare Part B deductible may be paid for by selecting either Plan C or F if you became Medicare-eligible prior to January 1, 2020. Keep your Plan C or Plan F if you have one. Long-term care, vision care and eyeglasses, dental care, hearing aids, or private-duty nursing are not covered by Medigap insurance.

What isn’t Covered by Medicare?

Some medical procedures are not covered by Original Medicare.

  • Long-term care
  • Dental care (with some exceptions)
  • Vision exams needed to prescribe glasses
  • Dentures
  • Cosmetic surgery
  • Acupuncture
  • Hearing aids and related exams
  • Routine foot care
 

Medicare Supplement Insurance (Medigap) and Medicare Advantage plans are available to fill the gaps in coverage left by Original Medicare.

How Do I Enroll in Medicare?

Medicare enrollment can be completed in a few different ways. Certain individuals will be enrolled in Medicare automatically, while others will need to take proactive steps to do so. Three months before a planned start date, everyone should double-check with the Social Security Administration to make sure their paperwork is in order.

In the event that you meet the following criteria, Medicare will automatically enrol you:

  • Have already begun receiving Social Security benefits (at least four months prior to start)
  • Enjoy the benefits offered by the Railroad Retirement Board (RRB) of the United States (at least four months prior to start)
  • Have a 24-month Social Security disability and are under 65
  • Caused by amyotrophic lateral sclerosis (also known as Lou Gehrig’s disease, ALS, or end-stage renal disease, ESRD),

If you meet any of the following criteria, you must initiate your Medicare enrollment process independently:

  • Have reached the age of 65
    Are over 65 and not collecting Social Security

Your enrollment timeline may also be affected by special circumstances unique to you. For those who are eligible for but have not yet enrolled in a group health plan through their employers, delaying enrollment in Medicare Part B until after age 65 may be an option.

Medicare enrollment periods

Medicare’s Initial Enrollment Period (IEP) spans the three months leading up to your 65th birthday, the month you turn 65, and the three months following your 65th birthday. If your 65th birthday is June 14, for instance, the start of your IEP is March 1 and the end is September 30.

Part B late enrollment penalties kick in if you don’t sign up during your initial enrollment period and you aren’t covered by an employer health plan or you are volunteering abroad for at least 12 months. During the General Enrollment Period is the only time you can sign up for coverage (GEP). The GEP period begins on January 1 and ends on March 31, and coverage begins on July 1.

If you don’t enrol in Part B by the end of your IEP, you won’t be able to enrol in a Medicare Advantage plan until the General Enrollment Period (GEP). GEP enrollees have the option of signing up for either a Medicare Advantage Plan or Medicare Prescription Drug Coverage (Part D) between April 1 and June 30. During the first six months of having Medicare Part B, you are eligible to sign up for a Medigap policy.

When does Medicare coverage start?

When you enrol in Medicare determines when your coverage will begin. Keep in mind that the IEP enrollment period extends for a total of nine months: three months prior to your 65th birthday, the month you turn 65, and three months afterwards.

For example:

When You EnrollWhen Coverage StartsExample: Turning 65 on May 10
The three months before you turn 65The first day of the month you turn 65May 1
The month you turn 65The first day of the month after you turn 65June 1
The month after you turn 65Two months after you sign upAugust 1
Two or three months after you turn 65Three months after you sign upOctober 1 (if you enroll in July)

November 1 (if you enroll in August)

If you sign up for Medicare Parts A and B during your IEP, you’ll also be able to enrol in Medigap and either Original Medicare or a Medicare Advantage plan, and have those coverages begin on the same day.

Your coverage will typically begin the following month after you enrol during a Special Enrollment Period.

You can apply for Medicare either online through the SSA’s website or in person at your local SSA office.

 

More to explorer

Does Medicare Cover Dental Care?

Does Medicare Cover Dental Care?

Original Medicare And Dental Coverage does Medicare cover dental? Initial Medicare Generally speaking, dental treatment is not covered by Parts A and

What is Medigap and how does it work?

What is Medigap and how does it work?

The “gaps” in Medicare coverage refer to these uninsured expenses. Medigap acts as a supplement to Original Medicare and fills up the

What Is Medicare?

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